Skender Uku

Type of the article: Research Article

Abstract
Small and medium-sized enterprises (SMEs) are crucial to Albania’s economic growth and employment generation; however, their performance is hindered by weaknesses in financial management. The purpose of this study is to examine how specific financial practices determine firm-level outcomes in terms of revenue and employment. A quantitative methodology was applied, using survey data from 86 SMEs processed through correlation analysis, ANOVA, and linear regression models. The results show that business financing exerts the strongest positive effect on employment (B = 10.098), followed by accounting information systems (B = 7.3), while cash management has a negative impact (B = −5.408). Regarding revenue, business financing again demonstrates a significant positive influence (B = 1.306), with client management also contributing positively (B = 0.284). A univariate regression confirms a strong positive relationship between revenue and employment, with revenue influencing employment at a coefficient of 7.178. These findings highlight that structured financing and accounting systems are critical drivers of SME performance, while efficiency gains in cash management may reduce workforce size. The study concludes that strengthening financial governance is essential for enhancing the sustainability and competitiveness of Albanian SMEs.